THE long-running court action seeking legal redress for car buyers who are alleged to have been gouged with excessive interest under the flex commission sales model, looks as though it will wind up in court following the failure of court-ordered mediation.

Participants in the class action have been told that the mediation was unsuccessful and the parties have failed to reach an agreement to settle the case.

The parties are now seeking a trial date that will be some time later this year.

The class action is open to all those who bought car finance from a car dealer in the following circumstances:

• ANZ (‘Esanda’) between 1 January 2011 and 31 March 2016;
• Macquarie Leasing between 1 March 2013 and 31 October 2018; and/or
• Westpac & St George between 1 March 2013 and 31 October 2018. 

The fact that the mediation failed means that those who had not registered their interest before the mediation (and would therefore not have been able to participate in a payout had the mediation succeeded), can now apply to be part of the class action.

Maurice Blackburn Lawyers says that more than one million Australians are potentially eligible for these class actions. Flex commissions were paid in relation to most, if not all, consumer car loans during these time periods.

The firm said in a bulletin that flex commission arrangements allowed car dealers to set the interest rate and loan term on car loans. The higher the interest rate and the longer the loan term, the greater the commission received by the dealer. These arrangements were banned by ASIC on 1 November 2018. 

The plaintiffs, on behalf of group members in these class actions, allege that flex commissions were unfair and unlawful and resulted in consumers paying higher interest rates on their car loans than they otherwise would have. 

The class action seeks compensation and other relief for those who have been affected.

Maurice Blackburn said that car loans that started with Esanda and then were transferred to Macquarie in 2016 are part of the ANZ (Esanda) Car Loan Class Action. Car Loans with Bank of Melbourne or BankSA were arranged under Westpac or St George’s credit licence.

The firm says that it does not matter whether or not you have paid off the car loan and whether or not you still have the car you paid for with the car loan.

The class action covers car loans on new and used vehicles. It only covers consumer car loans arranged through car dealers. It does not cover loans arranged directly with the banks, novated leases, business loans or goods loans.